July 28, 2020 / 2:30 PM / 11 days ago

Russia's En+ adds to calls for Nornickel management overhaul after spill

MOSCOW (Reuters) - Russia’s En+ Group said on Tuesday it backed a call to overhaul the management of Norilsk Nickel (Nornickel) after a major fuel spill in the Arctic at one of the nickel and palladium producer’s plants.

FILE PHOTO: The logo of Russia's miner Norilsk Nickel (Nornickel) is seen on a board at the St. Petersburg International Economic Forum 2017 (SPIEF 2017) in St. Petersburg, Russia, June 1, 2017. REUTERS/Sergei Karpukhin/File Photo

Russian aluminium giant Rusal, a subsidiary of En+ that has a stake in Nornickel, called this month for management changes at Nornickel, after 21,000 tonnes of diesel leaked into rivers and subsoil on May 29 in the Arctic city of Norilsk.

“We don’t diverge in our views,” En+ Chairman Gregory Barker told Reuters. “We have pressed the management of Norilsk (Nickel) to accede to requests for an independent review with the appointment of an independent environmental oversight committee.”

Barker said it was too early to discuss the possible impact of the spill on Nornickel’s dividend payouts, and that it was necessary to wait for results of the review.

“At that point it becomes appropriate to really start to cost this up ... and allocate responsibility,” Barker said.

Authorities have priced the damage to the environment at $2 billion, a sum unprecedented for Russia.

After the spill, Vladimir Potanin, Nornickel’s co-owner and president, proposed that he and other major shareholders cap the company’s final 2020 dividend at $1 billion.

Rusal, which receives significant dividends from its 27.8% stake in Nornickel, has said it is waiting for the company’s next board meeting when sources of funds to cover compensation costs could be discussed.

The aluminium producer, which on Monday reported a 10% fall in its second quarter sales, expects demand to be down by between 8% and 9% in 2020 as a whole, Rusal’s head of sales and marketing Roman Andryushin said.

Andryushin said the company’s earlier forecast, of a drop between 8% and 14%, had been revised following positive market developments in China.

Reporting by Polina Ivanova and Anastasia Lyrchikova; Editing by Edmund Blair and Barbara Lewis

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